Correlation Between Netflix and Metropolitan Land
Can any of the company-specific risk be diversified away by investing in both Netflix and Metropolitan Land at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Netflix and Metropolitan Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netflix and Metropolitan Land Tbk, you can compare the effects of market volatilities on Netflix and Metropolitan Land and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Netflix with a short position of Metropolitan Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netflix and Metropolitan Land.
Diversification Opportunities for Netflix and Metropolitan Land
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Netflix and Metropolitan is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Netflix and Metropolitan Land Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Land Tbk and Netflix is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Netflix are associated (or correlated) with Metropolitan Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Land Tbk has no effect on the direction of Netflix i.e., Netflix and Metropolitan Land go up and down completely randomly.
Pair Corralation between Netflix and Metropolitan Land
Given the investment horizon of 90 days Netflix is expected to generate 0.87 times more return on investment than Metropolitan Land. However, Netflix is 1.15 times less risky than Metropolitan Land. It trades about 0.58 of its potential returns per unit of risk. Metropolitan Land Tbk is currently generating about -0.2 per unit of risk. If you would invest 75,551 in Netflix on September 5, 2024 and sell it today you would earn a total of 14,666 from holding Netflix or generate 19.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Netflix vs. Metropolitan Land Tbk
Performance |
Timeline |
Netflix |
Metropolitan Land Tbk |
Netflix and Metropolitan Land Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Netflix and Metropolitan Land
The main advantage of trading using opposite Netflix and Metropolitan Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netflix position performs unexpectedly, Metropolitan Land can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Metropolitan Land will offset losses from the drop in Metropolitan Land's long position.Netflix vs. Paramount Global Class | Netflix vs. Roku Inc | Netflix vs. Warner Bros Discovery | Netflix vs. AMC Entertainment Holdings |
Metropolitan Land vs. Jaya Real Property | Metropolitan Land vs. Intiland Development Tbk | Metropolitan Land vs. Modernland Realty Ltd | Metropolitan Land vs. Lippo Cikarang Tbk |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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